The following is the trial balance of Transit Ltd at 31^st March 2008.

You ascertain the following:

All the motor vans were purchased on 1 April 2005. Depreciation has been, and it to be, provided at the rate of 20% per annum on cost from the date of purchase to the date of sale. On 31^st March 2008 one van, which had cost 900, was sold for 550, as part settlement of the price of 800 of a new van, but no entries with regard to these transactions were made in the books.

The estimated corporation tax liability for the year to 31^st March 2008 is 12,700. It is proposed that the final dividend of 10% for the year to 31^st March 2008. Stock at the lower of cost or net realized value on 31^st March 2008 is 16,700.

Required:

Prepare, without taking account the relevant statutory provisions;

A profit and loss account for the year ended 31^st March 2008: and a balance sheet at that date. (15 Marks)

f f Issued share capital (ordinary shares of f 1 each 42,000 Leasehol properties, at cost 75,000 Motorvans, at cost (use for distribution) 2,500 Provision for depreciation on motor vans to 31st Mar-07 1,000 Administration expenses 7,650 Distribution expenses 10,000 Stock, 31 March 2007 12,000 Purchases 138,750 Sales 206,500 Director's remuneration (administrative) 25,000 Rents received 3,600 Investments at cost 6,750 Investment income 340 7% Debentures 15,000 Debentures interest 1,050 Bank interest 162 Bank overdraft 730 Debtors and Creditors 31,000 24,100 Interim dividend paid 1,260 Profit and Loss account, 31 March 2007 0 17,852 311,122 311,122